Transcript dependent on core

Development Case Study: Jamaica
Development Case Study: Bangladesh
What is development?
development: The extent to which a society is
making effective use of its human and natural
resources.
developing: progress is being made in
technology, production, and socioeconomic
welfare
Continuum with huge global disparities.
MDCs and LDCs
MDC = More Developed Country
(“developed”)
has progressed further along continuum
economic challenge: maintain high level of
development at the new global scale of
economy
LDC = Less Developed Country
(“developing”)
economic challenge: find connections to the
global economy by taking advantage of local
diversity in skills and resources
What is development?
Manufacturing gravel in Trivandrum, India
Measuring Development
Economic Indicators:
GNP = Gross National Product
● created by economists to compare countries
● total value of officially recorded goods and
services produced in a year (inside and
outside state territory)
Measuring Development
Economic Indicators:
GDP = Gross Domestic Product
● goods and services produced within a
country during a given year
● GDP per capita = GDP divided by
population number
● Can mask variation / distribution of wealth
Measuring Development
Economic Indicators:
GNI = Gross National Income
● monetary worth of what is produced within a
country plus income received from
investments outside the country
● GNI per capita = GNI divided by population
● limitations:
○ What about informal economy?
○ Masks uneven distribution of wealth
○ Does not account for production costs
Measuring Development
Economic Indicators:
GNI clearly shows contrast between rich and
poor countries:
2008
Japan
$31,410
USA
$41,950
Luxembourg $65,340
Nigeria
$ 1,040
Indonesia
$ 3,720
Measuring Development
Economic Indicators: technology and production
● types of jobs (primary, secondary, tertiary)
● productivity per worker (level of mechanization)
● transportation and communication services per
person
Measuring Development
Demographic Indicators
● life expectancy at birth (60+ in LDC, 70+ in
MDC)
■ result for MDC??
● infant mortality rate (94% LDC, 99.5% MDC)
● natural increase rate (1.5% LDC, 0.1% MDC)
■ result for LDC??
● crude birth rate (24/1,000 LDC, 11/1,000 MDC)
Measuring Development
Social Indicators
● dependency ratio - number of dependents
(young and old) that each 100 employed people
must support)
Measuring Development
Social Indicators
● education and literacy
○ avg. # of school years attended (10 MDC, 2
LDC)
○ student/teacher ratio (twice as high in LDC)
○ literacy rate (98%+ in MDC, <60% LDC)
Measuring Development
Social Indicators
● health and welfare
○ expenditures on health care
○ influenced by diet (calories, protein)
○ health care as government service
Measuring Development
United Nations Human Development Index (HDI)
Combination of factors:
1. per capita GDP (economic)
2. literacy rates (social)
3. school enrollment rates (social)
4. life expectancy at birth (demographic)
Range: 0 - 1
Average: .65
Measuring Development
United Nations Human Development Index (HDI)
Measuring Development
United Nations Human Development Index (HDI)
2000 United Nations Millenium Declaration
Goals by 2015:
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eradicate extreme poverty and hunger
achieve universal primary education
promote gender equality and empower women
reduce child mortality
improve maternal health
combat HIV/AIDS
ensure environmental sustainability
develop a global partnership for development
How can LDCs develop? Models of Development
What is the developed world?
● 40 years ago - places populated with people of
European ancestry; Japan
● Today - Distinctions between MDC and LDC is
blurred:
○ oil-rich Middle East
○ collapse of Soviet Union
○ newly industrializing East Asia
● General North/South pattern still exists
How can LDCs develop? Models of Development
History of ideas:
Modernization (Rostow)
Dependency (includes World Systems Theory)
Neoliberal Counter-revolution
Sustainable Development
How can LDCs develop? Models of Development
Rostow’s Modernization Model / Stages of
Development
● 1940s-1960s (post WWII, decolonization)
● classic “developed - developing underdeveloped” ladder of development
● assumes that all countries follow a similar path
(European) and learn from each other
● Identified 5 stages
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 1: Traditional
Village in Lesotho. 86% of the resident workforce in
Lesotho is engaged in subsistence agriculture.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 1: Traditional
Economy
subsistence:
● output not traded or recorded
● barter system
● limited production
● >75% in primary sector
Society
hierarchical
Political
Power
regionally based in the hands of landowners
Values
resistant to change; focus on old traditions
(U.S. before independence)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 2 - Preconditions for Takeoff
The use of some capital equipment can help increase
productivity and generate small surpluses which can be
traded.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 2: Preconditions of takeoff
Economy
-- surplus of agriculture and capital
-- expansion of trade and manufacturing
-- necessity of external funding
-- some growth in savings and investment
Society
beginnings of a commercial class with some
urbanization
Political
Power
centralized national government
Values
rising spirit of progress and openness
(U.S. - early 1800s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 3: Takeoff
At this stage, industrial growth may be linked to primary
industries. The level of technology required will be low.
(image: diamond mine in Lesotho)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 3: Takeoff
Economy
-- rapid expansion of industry
--surge of technology
--commercial agriculture
--number employed in agriculture declines
Society
--increasingly dominant entrepreneurial class
--some regional growth
Political
Power
powerful groups encourage modernization
Values
increased investment of capital for profit
(U.S. - 1850s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 4: Drive to maturity
As the economy matures, technology plays an increasing
role in developing high value added products.
(Image: Automotive plant using industrial robotics
technology.)
Models of Development
Rostow’s Modernization Model / Stages of
Development Stage 4: Drive to maturity
Economy
-- technology extends to all sectors
--labor-saving devices are made
--growth becomes self-sustaining / wealth
generation enables further investment
Society
--urbanization
--increased in skilled and professional workers
Political
Power
industrial leaders are highly influential
Values
--emphasis on technology
--expectation of progress
(U.S. - late 1800s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 5: Age of Mass Consumption
Service industry dominates the economy -- banking, insurance, finance, marketing,
entertainment, leisure and so on.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 5: Age of Mass Consumption
Economy
--high output levels
--more use and production of durable goods
--service sector dominates (>50%)
Society
--new middle class
--shift to the suburbs
--population growth stabilizes
Political
Power
--social welfare
-more resources for military and security
Values
--increased acquisition of consumer goods
(U.S. early 1900s - present)
How can LDCs develop? Models of Development
Rostow’s Modernization Model / Stages of
Development
based on economic structural change:
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investment
substitution of capital for labor
technology transfer
large-scale industrialization projects
(LDCs should follow model of economically
powerful countries / European countries in order to
develop.)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Example: Four Asian Dragons
(South Korea, Singapore, Taiwan, Hong Kong)
● former colonies or occupied territories
● development by producing manufactured
goods with low labor costs
Models of Development
Rostow’s Modernization Model / Stages of
Development
Example: Petroleum-rich Arabian peninsula
(Saudi Arabia, Kuwait, Bahrain, Oman, UAE)
● 1970s - petroleum prices high
● overnight transformation
Models of Development
Rostow’s Modernization Model / Stages of
Development
Criticisms:
● does not consider geographic differences
● Western bias / assumptions of “progress”
● requires infrastructure
● does not consider global scale / effects of other
countries (global market, competition for
resources)
● increased dependence on MDCs
Models of Development
Dependency School of Thought
EXPLANATION:
● 1970s:
○ reality - few LDC’s progressing linearly from
stage to stage as Rostow predicted
○ concerns with human welfare
● LDCs are limited by economic and political
relationships with MDCs.
● International “division of labor”
● inevitable result of capitalist drive?
Models of Development
Dependency School of Thought
EXPLANATION:
● global economy creates structural
circumstances difficult for poorer regions to
overcome
○ ex: concentration of wealth in certain areas,
unequal relations between places
Poor countries face different obstacles than
Western states of Rostow’s model, will not
“modernize” in same way
Models of Development
Dependency School of Thought
Strategies to achieve development:
● small-scale and rural enterprises
● import substitution (manufacture own products)
● nationalization
Models of Development
Dependency School of Thought
colonial origins
Models of Development
Dependency School of Thought
colonial origins
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
core
periphery
semi-periphery
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
core processes
● generate wealth in a place for people
within that place
○ require higher levels of education
○ sophisticated technology
○ higher wages, benefits
core regions
● high socioeconomic prosperity
● dominate world economy
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
peripheral processes
● generate little wealth for people within
that place
○ lower levels of education
○ lower salaries
○ less technology
peripheral regions
● poor
● dependent on core
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
role of the semiperiphery
● region which practices both
core and peripheral
processes
● buffer zone:
exploited by core, exploits
periphery
○ more power than
periphery
○ heavily influenced by
the core
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Applicable at scales beyond the state (country)
● within a region
● within a state (country)
● in a local area
Models of Development
Dependency School of Thought
Neocolonialism
● Economy of LDCs controlled by MDCs.
● Global economy - this is difficult to overcome
○ unequal distribution of resources
○ unequal relations between places
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Major differences from Modernization Model:
● sensitive to geographic context; does not
assume that socioeconomic change will
occur the same way in all places
● equal wealth not possible in capitalist global
economy
● makes power relations between places
explicit
Models of Development
Dependency School of Thought
Criticisms:
● Offers causes but no solutions
● Little hope for prosperity in LDCs
● Little attention to geographic differences
REVIEW
What is development?
How is it measured?
How did Rostow explain development?
How do Dependency Theorists explain
development?
How did Wallerstein explain development?
What are the key differences between the
Modernization and Dependency schools of
thought?
Models of Development
Neoliberalism
Origin
post WWII - Decolonization wave →
● International bank loans to new countries
● Formation of International Monetary Fund (IMF)
and World Bank
1980s - End of Cold War →
● international community used loans to
discourage state-owned industries, encourage
free trade
Models of Development
Neoliberalism
Theory
● Government intervention into markets is
inefficient and undesirable.
● Protectionism* and state-owned industries
perpetuate dependency.
*protectionism
imposing high tariffs on foreign goods to protect
home grown industries
Models of Development
Neoliberalism
Strategies to achieve development
Loans → better infrastructure → more businesses
→ more taxes to repay loan
Structural adjustment loans have conditions
attached to guide how the money should be used.
Models of Development
Neoliberalism
Strategies to achieve development
Two major lenders for international loans:
● International Monetary Fund (IMF)
● World Bank
○ International Bank for Reconstruction and
Development (IBRD)
○ International Development Association
(IDA)
Models of Development
Neoliberalism
Strategies to achieve development
Structural Adjustment Loan Examples:
(“strings” / conditions attached to loans)
● sell government-owned industries to the private
sector
● free trade
● allow own currency to devalue to make exports
attractive
● health and education investment
● government reforms
● require better fiscal management
● the type of projects allowed
Models of Development
Neoliberalism
Results ● Private ownership of services and
businesses
● Economic globalization
● Corporations control regions and states
Models of Development
Neoliberalism
Example: China
Mao Zedong
● leader of 1949
Communist Revolution
● “Great Leap Forward” (1958)
● agricultural communes
● state owned factories
(“backyard” industry)
Result: 20 million starve by 1962
Models of Development
Neoliberalism
Example: China
● Mao’s successor:
Deng Xiaoping
Capitalist reforms:
● farmers can sell surplus
● encourages foreign investment
● competition between state-owned factories
Result: 2nd highest GDP in world after
US,
Models of Development
Neoliberalism
Criticisms:
● Infrastructure projects that are expensive
failures.
● Large debts that can’t be repaid.
Models of Development
Sustainable Development
Theory: Progress should not come at the
expense of future generations.
Concerned with:
● climate
● biodiversity
● forests
● pollution
● resources
Models of Development
Sustainable Development
Requires New
Indicators??
Ideas?
Models of Development
Sustainable Development
Strategies to achieve development
Appropriate Technology Not Appropriate
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looms
efficient stoves
clay-pot water filters
composting systems
bicycle rickshaws
paper strips for
disease testing
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oil-fired power plants
infant formula
chain saws
combine harvesters
Models of Development
Sustainable Development
Strategies to achieve development
Fair Trade
● protect workers - rights, safety, wages
● protect producers - cooperatives for loans
● international standards
largest organization in
North America:
Ten Thousand Villages